MTN Restates its Confidence in its Nigerian Subsidiary

South Africa's M-Cell/MTN Group has reaffirmed its position that the investment in its Nigeria operation will yield positive results in time as the company continues to operate beyond initial business plan projections.

"We remain very optimistic about the investments we have made and to date our operations in Nigeria have performed very well," says Group CEO, Phuthuma Nhleko.

"By the end of July 2002, over 500 000 subscribers had been signed up on the network and ARPU (average revenue per user) levels remain encouraging at $60. This far exceeds an initial business plan of 174 000 subscribers and the license rollout obligation to reach 100 000 subscribers in 12 months after commercial launch, while also exceeding our original projected ARPU. The Nigerian operation has required substantial investment, which has resulted in our current unhedged debt of around US$240 million, and we are constantly looking at ways to reduce our currency risk in this regard. We will continue to monitor and stay abreast of developments in the country, and to assess the risk profile of our investment in Nigeria," says Nhleko.

One of the major challenges facing MTN Nigeria is meeting the rapidly growing demand for GSM services. It currently has five operational switching centers with 190 base stations connected to the GSM network. A further 120 base stations are planned for rollout in the next few months and additional switching centers are being introduced to provide much needed core switching capacity to the network. MTN Nigeria is also building its own microwave backbone route that will provide the necessary transmission infrastructure to support traffic flow routes in the country. The ability to carry traffic on its own backbone will increase the company's network call quality and availability.'"

Posted to the site on 9th September 2002